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MPSC Grants Wisconsin Electric Power Company Limited Accounting Authority to Defer Unrecovered Costs of Implementing Customer Choice


Contact:  Judy Palnau, 517-241-3323
Agency:  Michigan Public Service Commission  

August 29, 2013 - The Michigan Public Service Commission (MPSC) today granted Wisconsin Electric Power Company accounting authority to defer unrecovered costs of implementing customer choice, subject to certain limitations.

The utility in its August 13 filing said that within the last 90 days, customers comprising 85 percent of its electric load have submitted enrollment forms to switch to choice service. The company alleges that without approval of its request, the anticipated reductions in sales levels in Michigan means the utility will no longer be able to recover the authorized costs associated with the company's Michigan operations from Michigan ratepayers, and it states that its ongoing annualized Michigan full-requirements retail service level will decrease to approximately 376,000 megawatt-hours, or approximately 15 percent of the projected energy sales levels used to design current base rates (Case No. U-16830).

The utility also said it is concerned by an obligation imposed on the utility by the Midcontinent Independent System Operator, Inc. (MISO) to continue operating and maintaining the Presque Isle Power Plant to support the reliability of the electricity system used to provide service to Wisconsin Electric's connected customers, including choice customers, in the Upper Peninsula and to the rest of the MISO footprint.

In today's order, the MPSC said that to be consistent with its regulation in the past, it will approve the utility's Aug. 13 application in a limited fashion by authorizing the company to use deferred accounting only with regard to a portion of the production costs intended to be recovered via demand and energy rates applicable to energy sold to Michigan customers that have recently indicated their intent to switch to choice, on a monthly basis beginning Sept. 2013. This is for accounting purposes only and will not affect current rates for customers.

While Michigan law governing choice sales generally provides that no more than 10 percent of an electric utility's average weather-adjusted retail sales for the preceding calendar year may take service from an alternative electric supplier at any time, another subsection of that law permits "an iron ore mining facility, iron ore processing facility, or both, located in the Upper Peninsula of this state" to purchase all or any portion of its electricity from an alternative electric supplier, regardless of whether the sales exceed 10 percent of the serving electric utility's average weather-adjusted retail sales."

The MPSC is an agency within the Department of Licensing and Regulatory Affairs.

Case No. U-17463

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